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A Georgia-Pacific LLC unit is blaming “abuses in the tort system” for the skyrocketing number of lawsuits that forced it to file for chapter 11 protection on Thursday, Texas Lawyer reported today. Bestwall LLC, which was created in July to manage Georgia-Pacific’s asbestos docket, is the latest firm to file for bankruptcy due to rising numbers of lawsuits brought by plaintiffs who claim they or their family members got mesothelioma from exposure to asbestos in their products. But, in a refrain popular among tort reformers, Bestwall alleges that plaintiffs lawyers aren’t being truthful about all the products their clients were exposed to that might have contained asbestos. “The breadth and magnitude of the asbestos litigation pending against Bestwall are wildly disproportionate to any legal liability Bestwall could possibly have,” wrote Garland Cassada, an attorney for Bestwall, in an information brief filed in bankruptcy court. Cassada, of Robinson, Bradshaw & Hinson, is working alongside Bestwall’s lead bankruptcy counsel, Greg Gordon, a partner in Jones Day’s Dallas office. “The massive increase in the number of claims against, and the size of the plaintiffs’ settlement demands to, Bestwall have been driven by various interrelated shortcomings of and abuses in the tort system.”

Global A&T Electronics Ltd. has reached a deal with bondholders that will slash almost 40 percent off of the semiconductor company’s debt load of more than $1.1 billion, WSJ Pro Bankruptcy reported. The company said on Thursday that the deal, which will be implemented through a pre-packaged bankruptcy plan, has the backing of 85 percent of its bondholders and its private-equity backers, Affinity Equity Partners and TPG Capital. In addition to reducing its funded debt to a total of $665 million the deal cuts Global A&T’s debt service by nearly half, to about $56.5 million. Under the terms of the proposed deal, holders of $625 million in debt coming due in 2019 would receive $540 million of new debt. Other creditors owed $500 million from a previous bond exchange would receive $110 million in new debt and a 31 percent stake in the restructured company.

A $620 million court fight that could upset GenOn Energy Inc.’s plan to separate from NRG Energy Inc. will wrap up next week, with a ruling as early as today, WSJ Pro Bankruptcy reported. Bankruptcy Judge David Jones said at a hearing on Friday in Houston that he expects to rule from the bench on a dispute between GenOn and owners of power plants in Maryland. Final arguments are set to start this afternoon in the U.S. Bankruptcy Court for the Southern District of Texas. Owners of the Maryland plant accuse GenOn of draining cash from GenMa, leaving them with a financially unstable tenant. GenOn denies the allegations, and says plant owners have no claim to press in its bankruptcy.

A chapter 11 trustee representing a Tri-State area coal entrepreneur has filed suit against an Ohio-based bank and an affiliated insurance agency alleging the bank withheld information about the true value of the companies in an alleged effort to bamboozle him into a financial agreement that bankrupted the producer, the Huntington (W. Va.) Herald-Dispatch reported today. On behalf of Dennis Ray Johnson II, the former owner of nine coal companies, the trustee filed a federal lawsuit in the Southern District of West Virginia against Peoples Bank, Peoples Insurance Agency, Great American Insurance Company of New York and bankruptcy receiver Zachary B. Burkons. Johnson's companies, which were based in West Virginia and Kentucky, included DJWV, Southern Marine Services, Southern Marine Terminal, Redbud Dock, Green Coal, Appalachian Mining & Reclamation, Producer's Land, Producer's Coal and Joint Venture Development. Trustee Thomas Fluharty alleges through a long-standing relationship between Johnson and a former Peoples Bank employee, the bank convinced the coal group to enter into a forbearance agreement in 2015 to prevent foreclosure. The bank and Johnson had started their loan relationship in 2011, which resulted in about $19 million of loans.

Brazil’s Odebrecht Oil & Gas filed for bankruptcy protection in the U.S. Friday to help implement a previously announced multibillion-dollar debt restructuring, the Wall Street Journal reported today. Odebrecht Oil & Gas, an arm of engineering conglomerate Odebrecht SA, sought chapter 15 protection, the section of the bankruptcy code that deals with international insolvencies, in the U.S. Bankruptcy Court in New York. In May, Odebrecht’s oil and gas arm entered into an agreement with a group of creditors to restructure its financial debt. The reorganization plan, which covers $5 billion in debt, was filed with a court in Rio de Janeiro. Creditors representing more than 60% of the claims accepted the plan, the company said in a statement in May. Odebrecht is one of a number of conglomerates snared in a large corruption scandal involving state-controlled oil company Petróleo Brasileiro SA, known as Petrobras. Odebrecht signed a multibillion anticorruption settlement with Brazilian, U.S. and Swiss prosecutors in December following a two-year investigation of bribery of public officials that has sent politicians and executives from Petrobras and several construction companies to prison. The closely held construction firm admitted to violating foreign bribery laws.

Soft serve ice cream chain Dairy Queen shuttered the doors of 22 underperforming locations in Texas, Oklahoma and New Mexico after a Texas-based franchisee, Vasari LLC, announced it has filed for chapter 11 protection, FoxBusiness.com reported yesterday. Vasari, who owns more than 75 locations, said the move comes as the company begins its restructuring plan to create a “smaller but financially stronger company” after many of its locations were negatively impacted by low oil prices and temporary store closures caused by Hurricane Harvey earlier this fall. Dairy Queen, which is owned by International Dairy Queen, Inc, a subsidiary of Berkshire Hathaway (BRK.A) told FOX Business in a statement that “this was the decision of the individual franchisee." According to CBS affiliate KLBK, Vasari had a debt between $10 million and $50 million and the bankruptcy will allow the company to reorganize its debt instead of having a liquidation.

The potential sale of a bankrupt Eden hospital’s assets faces an objection from the lien holder of two hospital properties, the Winston-Salem (N.C.) Journal reported. The filing by First Citizens BancShares Inc., submitted yesterday, comes two days after the board of directors for Morehead Hospital accepted the bid of Miami for-profit company Empower iHCC Inc. for the assets. Judge Benjamin Kahn, with the U.S. Bankruptcy Court for the Middle District of N.C., could say at a hearing on Monday in Greensboro whether he approves of the board’s choice. The hospital filed for chapter 11 bankruptcy protection July 10. First Citizens has a $1.34 million lien on the Dayspring and Thomson Street buildings. The bank was among seven qualified bidders for the assets. It submitted a credit bid of $1.34 million for the real property collateral of the buildings. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

The sudden bankruptcy of Toys ‘R’ Us has retailers, especially those at the low end of the credit spectrum, reassessing if they too are vulnerable to a vendor squeeze around the holidays, according to a WSJ Pro Bankruptcy commentary today. The speed with which Toys collapsed into chapter 11 after its vendors tightened payment terms is a wake-up call to retailers to reassess their liquidity to avoid a similar fate, according to a report issued on Wednesday by Moody’s Investors Service. “We think this is part of a broader crisis of confidence that could start to spread to other highly leveraged, lower-rated retailers,” Moody’s said. Vendors are typically the first pressure point when a brick-and-mortar retailer’s finances are stretched too thin, according to the commentary. Most retailers’ shelves are well-stocked for at least the first half of the holiday-shopping season, Moody’s said, but what is unknown “and potentially very difficult to determine” is whether they will be able to maintain “reloading” relationships for the later stages.

Teen fashion retailer Styles For Less Inc. is preparing to file for bankruptcy, a lawyer for the company said yesterday, Reuters reported. Styles For Less, based in Anaheim, Calif., will file for bankruptcy in the coming days, said Marc Winthrop, a senior partner at law firm Winthrop Couchot Golubow Hollander LLP, which is representing the company. The chain sells women’s clothes and accessories at about 100 stores in malls, outlets and strip centers across California, Nevada, Utah, Arizona and Florida, according to its website. The retailer plans to reorganize its debt during bankruptcy, and is seeking a loan to fund it through the process, Winthrop said. Styles For Less, which has close to 600 employees, will file in the U.S. Bankruptcy Court’s Central District of California, Winthrop added.

Bestwall LLC, an affiliate of Georgia-Pacific LLC, has sought bankruptcy protection after years of asbestos-related costs have piled up, the Wall Street Journal reported today. Bestwall, which once made building products that contained asbestos, sought chapter 11 protection today in the U.S. Bankruptcy Court in Charlotte, N.C. The bankruptcy filing comes as Bestwall looks to survive an onslaught of claims for asbestos damage that date back to the 1970s. While the asbestos litigation dates back nearly 40 years, Bestwall has decided to seek bankruptcy protection as litigation-costs have exponentially increased since 2000, according to data provided by Bestwall representatives. Between 1979 and 1999, the litigation costs averaged about $6 million per year. However, by 2000 the costs began to spike, and since then have cost the company about $2.8 billion.